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Alex Azar blasts Democratic ideas on drug prices as ineffective ‘gimmicks.’ Health and Human Services Secretary Alex Azar on Wednesday criticized Democrats’ push to give Medicare the power to directly negotiate for lower drug prices and to let Americans buy cheaper drugs from Canada. He said at an event held by the American Enterprise Institute that HHS would allow for negotiation for Medicare Part B, which is the section that reimburses doctors for drugs administered in a physician’s office, such as chemotherapy. But Azar stopped short of embracing an idea from Democrats to give Medicare the power to negotiate directly with the manufacturer. Under Medicare Part D, private health plans negotiate with drugmaker for discounts on their drugs. Democrats want to give Medicare that power instead. Azar shot down that idea by pointing to estimates from the nonpartisan Congressional Budget Office showing that direct negotiation wouldn’t generate savings. “We are not skeptical of ideas because of direct negotiation due to ideology, but due to pragmatism,” he said. Azar also bashed Vermont Sen. Bernie Sanders’ push to allow Americans buy cheaper drugs from Canada. “It is a gimmick,” Azar said. Canada’s drug market is too small to make a dent in U.S. drug prices, and companies may stop selling products to the country because they are concerned about re-importation into the U.S., he said.

Azar wants to scrap rebate system. The HHS secretary said a good way to bring down drug prices is to gut the system in which drug middlemen negotiate rebates with drug makers, by getting rid of the rebates altogether. “What if instead of the current system where drug companies pay rebates and middlemen take a cut, we just have fixed price discounts,” Azar said. The rebate system creates an incentive to keep list prices high because the middleman, the pharmacy benefits manager, gets a larger cut of the rebate. “If you want to cut the list price, PBMs have no incentive to do business with you,” said Azar, a former pharmaceutical executive. Azar said some PBMs have already moved to a fixed price discount instead of a rebate. He added that if PBMs don’t want to get on board, the administration has the power “to eliminate rebates … and end the corrupt bargain that keeps drug prices skyward.”

Azar also fights claims that administration went too easy on big pharma. Azar and other top administration officials have been speaking a lot since President Trump’s speech on drug prices. The goal has been to beat back some of the attacks from Democrats and Wall Street analysts that the administration is going easy on the pharmaceutical industry. Azar said Wednesday that wasn’t the case. He pointed to the plan to move certain drugs in Medicare Part B over to Part D. “This is really on their list of worst nightmares,” Azar said, referring to drugmakers. Private plans representing Medicare Part D negotiate for lower prices for drugs, and now certain drugs on Medicare Part B would have to undergo that same exercise. “Bringing negotiation to Part B drugs is such a potent way to bring down prices that pharma is already protesting the idea,” he said.

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Senators threaten CMS chief with subpoena to testify on Medicaid fraud. Sens. Ron Johnson, R-Wis., and Claire McCaskill, D-Mo., are threatening to subpoena Centers for Medicare and Medicaid Services chief Seema Verma if she doesn’t appear before the committee to discuss Medicaid fraud. The senators wrote in a letter to Verma Tuesday and released this morning that they have tried to get her to attend a hearing before the Senate Homeland Security and Governmental Affairs Committee since April 20, but she has declined repeatedly to testify. Now the senators say if Verma doesn’t confirm her appearance for a June 20 hearing, they may “seek alternative means to compel your testimony.”

House panel to take up another 34 opioid bills Thursday. The House Energy and Commerce Committee plans to wrap up its work on fighting the opioid epidemic on Thursday by considering whether to advance 34 bills to the full House. The effort builds on the 25 bills that the panel advanced to the House during a markup last week. Committee Chairman Greg Walden, R-Ore., said the 34 bills  will “bolster our prevention and public health efforts, and address key coverage and payment issues within Medicaid and Medicare.” Walden had said that he wanted to get the bills through the House by the Memorial Day recess, but conceded last week that timetable could slip.

Obamacare supporters seizing on rate increases to go after GOP. A few years ago, Republicans would send out blaring alerts whenever an insurer proposed a double-digit rate increase for its Obamacare plans, putting Democrats on the defensive. Now Democrats and Obamacare supporters are hoping to do the same to the GOP, seizing on proposed rate hikes as evidence of GOP “sabotage” of the law. The Obamacare advocacy group Protect Our Care announced its Rate Watch campaign Tuesday that will highlight proposed premium increases for Obamacare’s exchanges for 2019. The group said the goal of the campaign is to tie Republicans to the rate hikes because of moves such as the repeal of Obamacare’s individual mandate penalty that everyone have health insurance. “This is a purposeful, intentional campaign of sabotage that is making health insurance unaffordable,” Sen. Chris Murphy, D-Conn., said on a call with reporters Tuesday. Four states have released proposed rates for the exchanges for 2019, many of which would increase by double digits.

Oregon insurers propose modest Obamacare rate increases. Oregon’s seven Obamacare insurers are asking for an average nearly 8 percent rate increase for 2019, with some plans calling for hikes of as much as 16 percent. Of the seven insurers selling plans on the individual market and the law’s exchanges, six plan on raising rates next year between 5 percent and 16 percent. The other insurer aims to reduce rates by nearly 10 percent. Insurers proposing rate increases point to the repeal of Obamacare’s individual mandate penalty in 2019 as a reason.

Planned Parenthood, ACLU sue Iowa over six-week abortion ban. Planned Parenthood and the ACLU of Iowa filed a lawsuit Tuesday to strike down a state law that bans abortions after a fetal heartbeat is detected, typically after six weeks. It is the strictest abortion ban in the nation. The lawsuit said the six-week ban is “blatantly unconstitutional” and is extremely harmful to women. The groups add that some women don’t even know they are pregnant after six weeks. “This abortion ban is beyond extreme” said Rita Bettis, legal director for the ACLU of Iowa. “With it, Iowa politicians have tried to ban virtually all abortions for women in our state.” Republican Iowa Gov. Kim Reynolds signed the ban into law this month. The ban is set to go into effect July 1.

RUNDOWN

Wall Street Journal Novartis top lawyer departs over Cohen payments

Axios Idaho primary gives Medicaid expansion a boost

The Hill GOP chairman said he plans to hold hearings on Trump’s drug pricing proposals

Associated Press More U.S. adults try vaping but use is down, data shows

Kaiser Health New Reversing an overdose isn’t complicated, but getting the antidote can be

Bloomberg Obamacare startup Oscar will expand to new states, CEO says

Reuters Congo receives first doses of Ebola vaccine amid outbreak